KBL Boosts Sechaba Profit

  • KBL profit surged to P247.1m from P185.5m in the previous year
  • Coca Cola Beverages reported a 10% reduction in profit after tax
  • Sechaba holds a 49.9% share in KBL and 49.9% in Coca Cola

 

GAZETTE REPORTER 

Kgalagadi Breweries Limited (KBL), announced a substantial 33 percent increase in profit after tax for the half-year ending on 30 June 2023.

KBL’s profit surged from P185.5 million in the same period of the previous year to an impressive P247.1 million in the year under review, marking a significant contribution to Sechaba Holdings Limited’s (SBHL) overall improved performance.

Sechaba Holdings holds a substantial 49.9 percent share in KBL and an equal stake in Coca Cola Beverages (Botswana) (Pty) Ltd (CCBB).

Rigorous cost containment

Sechaba Chairman Tabuya Tau and Managing Director Faith Nteta highlighted the key drivers behind KBL’s success in a financial report released recently.

“KBL achieved a remarkable 33 percent increase compared to the previous year, primarily propelled by pricing strategies, rigorous cost containment measures, and increased other income,” they wrote in the report.

However, they noted, despite the impressive profit growth, Botswana’s leading producer of clear beer experienced a slight 0.5 percent decrease in volumes sold, dropping from 732.1 hectoliters (HL) to 728.7 HL.

 

KBL primarily focuses on manufacturing, importing, distributing, and marketing a diverse portfolio of clear beer, alcoholic fruit beverages and traditional beers.

Operational expenditure

In contrast, KBL’s sister company, CCBB, reported a 10 percent reduction in profit after tax. This decline was primarily attributed to a rise in operational expenditure, including maintenance costs, fuel expenses, and utilities.

Nevertheless, CCBB saw a 3 percent increase in volumes sold, rising from 515.8 HL in 2022 to 532.6 HL in the review period.

CCBB’s operations centre around manufacturing, importing, distributing, and marketing soft drinks, purified water, and other non-alcoholic beverages.

In aggregate, Sechaba Holdings achieved an impressive 55 percent increase in overall profit after tax when compared to the previous half-year results.

Substantial growth

This substantial growth was primarily fuelled by an increase in sales revenue. Total volumes also saw a 1 percent increase, rising from 1,247.9 HL to 1,261.3 HL.

SBHL’s revenue surged by 29 percent, primarily driven by the share of profit after tax from its associates (KBL and CCBB). Both CCBB and KBL demonstrated positive net revenue growth rates, with CCBB at 16.6 percent and KBL at 6.7 percent.

Sechaba Chairman Tau and Managing Director Nteta expressed satisfaction with the company’s financial position. “SBHL is pleased to report a robust liquidity position, exemplifying sound financial management and the ability to meet our immediate financial commitments,” they wrote.

Optimism 

“Our liquidity underscores our prudent financial practices, operational efficiency, and strategic planning. We believe we have ample liquidity to sustain operations for the next 12 months and beyond.”

Looking ahead, Tau and Nteta expressed optimism about the conducive business environment and its potential to foster enhanced performance for SBHL associates.

They emphasised the need for adaptability, responsiveness to market trends, and a commitment to sustainable practices to thrive in the evolving local and global business landscape, all in pursuit of optimising shareholder value.

The leadership at SBHL and its associates also stressed their strong emphasis on sustainability throughout their operations, from sourcing ingredients and adopting eco-friendly practices and packaging materials to meeting consumer demands and reducing their carbon footprint.